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Liquid Network

avoid.net/liquid-network→26/100·85% conf.
[AI-DRAFTED · AWAITING FACT-CHECK]

Last changed 2026-10-10 · Score recalculated — Rescored under Scoring v2, the published formula (avoid.net/scoring): 22 → 26. Problems weighed by who is responsible: incidents the subject suffered −20, problems around the subject, caused by others −0.8; legitimacy credit long-running +10; no established finding that it defrauded anyone, so it stays out of the red band; the penalty for incidents it suffered is capped at 20; a recent unresolved incident −51.6. Version history →

Why this score
Every page starts at65
Incidents it suffered (e.g. hacks)-20
Problems around it, caused by others-0.8
Long-running+10
Recent unresolved incident-51.6
Sum3
  • The penalty for incidents it suffered is capped at 20 points.

Score: 26/100 (kept between 0 and 100)

How scoring works →
anchored·3SgH6i…gwg8
last updated 2026-10-10

Summary

Liquid Network is a Bitcoin sidechain developed and operated by Blockstream, secured by a federation of exchanges and institutions. On September 6, 2026, an attacker exploited a cache key collision bug in the Elements codebase to mint approximately 4,000 unbacked L-BTC and redeem them for real Bitcoin via the SideSwap peg-out platform, draining roughly 95% of the Liquid Federation's reserves (about $320 million) in under 40 minutes. The attacker, claiming to be a white-hat, returned about 3,400 BTC after Blockstream patched the bug but retained roughly 598.5 BTC (~$47 million) as a self-declared bounty that Blockstream has publicly refused to honor, leaving the network's reserves under-collateralized and exchanges facing an extended service disruption.

Connected Entities

6 entities · 60 linked investigations
Organizations
□Ronin Bridge52□Blockstream Liquid Network32□Blockstream□Liquid Network
Protocols
⌂SideSwap
Tokens
♦Bitcoin97
Relationships
  • Blockstream Liquid Network→mentioned with→SideSwap(70%)
  • Blockstream Liquid Network→mentioned with→Blockstream(70%)
  • Blockstream Liquid Network→mentioned with→Bitcoin(80%)
  • SideSwap→mentioned with→Blockstream(70%)
  • SideSwap→mentioned with→Bitcoin(80%)
  • Liquid Network→mentioned with→Blockstream(70%)
  • Liquid Network→mentioned with→SideSwap(70%)
  • Liquid Network→mentioned with→Bitcoin(80%)
  • Blockstream Liquid Network→mentioned with→Liquid Network(80%)
  • Blockstream→mentioned with→Liquid Network(80%)
  • + 5 more
Also appears in
Crypto Dispensers / Virtual Assets LLC·26Blockchain Bandit·0Ronin Bridge·52Swiss Bitcoin Pay·64Lendf.me·30SafePal·70Bitcoin Xchange (Syria-based, ISIS-Linked)·0Abdelhakim Boukich·0Kevin Rose·57BitMEX (2026 Class Action — Insider Trading and Liquidation Fraud)·10

Connected Through

6 shared actors · 494 investigations

Distinct actors this investigation shares with others — holders, traders, and named parties. Shared infrastructure (exchanges, pools) is excluded.

Have evidence about Liquid Network?
0
Accepted
9
Under review
0
Rejected / revoked

9 submissions awaiting moderator review.

Timeline(7 events)

2018

Blockstream launches the Liquid Network, a federated Bitcoin sidechain for exchanges and institutions.

TRM Labs

August 2026

An earlier, incomplete patch to the Elements cache-key hashing logic is applied, but reportedly does not fully close the boundary condition later exploited.

CryptoBriefing (SlowMist analysis)

September 2026

The complete fix for the cache key collision bug is publicly committed to the Elements GitHub repository with a descriptive commit title, five days before it is exploited in production.

Scout research summary citing Elements GitHub repository

6 September 2026

Attacker mints roughly 4,000 unbacked L-BTC (~13:53 UTC) and redeems them for real Bitcoin via SideSwap (payout ~14:28 UTC), draining about 95% of the Liquid Federation's reserves (~$320 million); Blockstream halts block production and instructs exchanges to suspend L-BTC deposits/withdrawals.

The Block

7 September 2026

Attacker returns approximately 3,400 BTC (~85% of stolen funds) to the Liquid federation wallet after Blockstream patches the vulnerability, retaining roughly 598.5 BTC (~$47 million).

CoinDesk

September 2026

Liquid Network resumes block production and SideSwap reopens trading; federation peg-outs remain suspended, and on-chain reserves cover only about 85% of outstanding L-BTC supply.

CryptoSlate

11 September 2026

Blockstream publicly refuses the attacker's demand for a 10% bounty on recovered funds, calling it extortion and vowing to pursue the remaining ~598.5 BTC with law enforcement and forensic firms.

The Block
Provenance & Audit Trail
Recorded on Solana ✓Verify on-chain11 Wayback Archives

Decision Log

  • #2rescore+4Recorded on Solana ✓10/10/2026, 6:42:23 PM
    slot 455361979 · hash 2Z2jNDXRygNPygCrh2ezNgmAUm9ogsFBzzKYUY2HwKan
  • #1publishRecorded on Solana ✓9/12/2026, 5:09:22 PM
    slot 446482750 · hash APNC1ZVurX9Zmo8mTyXi9c5MsV4PonRErir24EYCwYHF

This investigation is cryptographically anchored to the Solana blockchain (2 decisions). 11 of 13 cited source URLs have an Internet Archive snapshot.

full audit log →version history →

model: claude-code-investigator

generated: 9/12/2026, 5:08:47 PM

last updated: 10/10/2026, 6:42:23 PM

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